Martin Sorrell may believe that marketers taking programmatic tech in-house and forgoing agency trading desks is “a temporary phenomenon,” per the The Wall Street Journal, but that didn’t stop WPP from this morning divesting its ad server in a deal with AppNexus to instead focus on “data, analytics and software applications.”
I don’t believe there’s a direct relationship between Sorrell’s comments and the AppNexus deal, but it’s not hard to see the indirect connection.
Sorrell’s full quote regarding the recent shift of programmatic ad-buying away from agency trading desks was: “It’s a temporary phenomenon. Our view is after a year or two it will change. I question whether clients will be able to apply technology successfully.”
Perhaps, then, that’s why WPP is planning to focus on data, analytics and software: It wants to be the company that can successfully use programmatic tech on behalf of clients. It's interesting, however, that while Sorrell contends that brands may not be able to apply the technology successfully, that’s exactly what brands are saying about agencies.
A recent AOL study indicated that among brands that have already taken programmatic buying in-house, 13% said they did so because they had “little choice … because their agencies lacked the expertise to do their programmatic buying for them.” An additional 77% of brands say they plan to take programmatic buying in-house in the next year, to top it off.
However, WPP’s push to be the data pros began just before “brands taking programmatic in-house” became the complete headline-grabber it is today: Xaxis recently spent $25 million to build a new data management platform (DMP), dubbed Turbine, that will be used in conjunction with the trading desk’s existing DMP. (Brands taking programmatic in-house has been a talking point dating back to at least 2013, but never has it garnered as much attention as it has in recent weeks.)
At the same time, some of WPP’s moves have been reactionary. Advertising Age reported in early August WPP’s plans to roll out a “flexible” alternative to Xaxis, the agency’s trading desk, “that it hopes will keep clients from moving their programmatic operations in-house.”
Last December I wrote about the “private trading desk model,” a term used by TubeMogul execs to define the trend of brands taking tech in-house. To close that piece, I wrote: “[I]t will be interesting to watch how the industry reshapes itself as brands get handsy.”
Less than one year later, we’re no longer waiting -- we’re in the midst of watching.
"Waiting" image via Shutterstock.